MADC to take Rs 170cr hit in Patanjali’s Mihan food park

(Pic credits: Getty Images)Nagpur: The Maharashtra Airport Development Company (MADC) is close to allotting 230 acres of land to Ramdev Baba’s Patanjali Ayurved for setting up a food park in Mihan. At a little over Rs25 lakh an acre, the latest entrant in FMCG business will be getting the land at a Rs75 lakh discount as Rs1 crore is the original price fixed by MADC.

To offset the loss in revenue, the MADC has decided to hike the cost of all remaining available land in Mihan by 15%.

“The financial bids were opened on Thursday and Patanjali was the only one we received for the specific land. This is a step taken towards land allotment,” said an MADC official.

The Mihan project, which was conceived in the late 90s and was to be a business game changer in Central India, is divided into Special Economic Zone (SEZ) and non-SEZ areas for which the rates have been fixed at Rs60 lakh and Rs1 crore an acre, respectively. Patanjali’s land falls in the non-SEZ area.

The reserve price in the tender was fixed at Rs25 lakh per acre and Patanjali is learnt to have bid at 5% above and will now get the land at Rs26,25,000 per acre. Just the land will cost Patanjali Rs60.37 crore as against Rs23230 crore it would have had to pay without any discount. MADC’s loss from this deal is around Rs 170 crore.

In the first round, MADC got two bids — Patanjali and another company from Mumbai. A second round of tendering was called as rules stipulated minimum three players. Only Patanjali emerged in the second round. A third round of bidding too was held in which again Patanjali was the sole player.

“The reserve price of the land offered to Patanjali was reduced by Rs75,000 per acre on the grounds that the particular patch was not developed. In order to mitigate the loss on account of the discount, MADC has decided to increase the rates for all vacant land by 15% for future buyers,” the MADC official said.

Land inside SEZ will now cost Rs75 lakh an acre and in non-SEZ it would be Rs1.15 crore. The MADC is already finding it tough to attract fresh investors for Mihan. “Increasing the rates may further hamper new proposals,” said a business analyst.

If it starts operations, Patanjali will have to meet the tender conditions of procuring raw materials to the tune of at least Rs100 crore per annum from farmers or tribals in the areas around Mihan. The tender conditions also have a clause on commitment to train 1,000 farmers a year from across the state on improving productivity and market intelligence to prepare them for agro business development.

The idea of setting up a food park took root with the visit of Ramdev Baba’s lieutenant and chairman of Patanjali Ayurved, Acharya Balkrishna, to Nagpur earlier this year. He was wooed by city MP Nitin Gadkari who heads the state government’s task-force to hard sell Mihan.

As reported by TOI earlier, Balkrishna had offered to set up the park if he got land for Rs10 lakh an acre. Since a direct allotment at such low rates did not fit into MADC rules, invitations for an open tender was issued.

In an independent move, the Maharashtra Industries Development Corproation (MIDC) has also initiated the process of acquiring land for Patanjali’s food park in Katol tehsil. For this project, Patanjali was wooed by local MLA Ashish Deshmukh.